5 Ways Save for Travel in 2021
As travel prices—and our wanderlust—increase, it’s time to get a savings plan to help make your travel dreams come true.
After a year of restrictions and #stayathome, we’re ready to travel. With more than a year of missed girls’ weekends, honeymoons, trips to grandma’s, and beach vacations deferred and delayed, people are itching to hit the road.
Hopper, a ticket app, is expecting the cost of plane tickets to begin to rise 6% every month starting in March, and they expect prices to skyrocket for the busy summer travel season.
1. Start with a why.
What is it about the upcoming trip that is so important to you? For example, you may have a new appreciation for your relationships and be looking to reconnect with friends you haven’t seen in ages. Or catching up on missed time to celebrate family birthdays and holidays. Or looking to take some time to clear your mind and rejuvenate. Or hungry for some blood-pumping adventure.
Whatever it is, getting clear on your why helps you stay focused on a goal. That might look like: “I need to plan some time to rest and relax because I need to lower my stress level and improve my wellbeing so I can be more calm and productive in my job.” Once you have a why for your trip, it will make it easier to stick to your savings goals.
2. Create a budget.
An easy first step is to first figure out exactly how much you’ll need to save for your trip. You’ll need to set a maximum budget for your trip and work backward, factoring in big expenses like airfare, lodging, or rental cars, but also things like food, tipping, special gear or outfits, entrance fees or tickets, pet sitting while you’re gone.
3. Set up automatic savings.
One tip most banking and financial professionals love sharing with clients is to automate, automate, automate. Automating savings helps make your goal a part of your monthly expenses, helps you prioritize your savings, and reduces the temptation to spend it. Set up a specific savings account and give it a name—like the 2021 Great Escape Fund—so that when you see it, you’re reminded of your goal. Then, set up a monthly transfer to come out of your primary account into your special account, and watch your fund grow.
4. Book as soon as possible.
With rates creeping up quickly and millions of travelers eagerly making plans, you want to be sure to make your bookings sooner than later—it’s unlikely prices will see big drops in the coming months. One good thing to come from the pandemic? Booking and cancellation flexibility is likely here to stay, at least for a while, so you can feel more comfortable committing knowing you have an option to change plans.
5. Consider a points card.
If you’re good at managing and paying off your credit cards, consider using a card that offers generous rewards points you can use for travel. For example, the Chase Sapphire Preferred card offers 2 points per dollar spent on dining and travel, an 80,000 point intro offer (worth $1000 toward travel) when you sign up, and a relatively low annual fee of $95. Points can be used toward anything from airline tickets to rental cars.
Financial planning is not just about saving and investing, it’s also about planning and spending wisely in a way that enhances our lives. As we begin to slowly and carefully find our way back into the outside world, trips and visits are sure to become a big priority as we look to make up for lost time adventuring and connecting with loved ones.
To help set your goals for 2021 and beyond, chat with one of our financial planners today.